Former Velda City Police Chief / City Administrator Sentenced to 27 Months in Prison for Stealing $307,100 in City Funds

ST. LOUIS - U.S. District Judge Cristian M. Stevens on Thursday sentenced the former police chief and city administrator of Velda City, Missouri to 27 months in prison for stealing $307,100 in city funds.

Judge Stevens also ordered Daniel Paulino, 52, to repay $248,929 to the city, as some of the money was recovered.

Paulino was appointed to the city administrator position in 2021. He was police chief until the department was dissolved in 2024, earning a salary of approximately $95,000 for the dual role. During an almost four-year period from 2021 to 2024, Paulino stole from the city in multiple ways:

• Paulino caused three city checks totaling $1,800 to be fraudulently issued to him.
• Paulino caused about 20 direct deposits totaling $30,667 in city funds, purportedly for additional payroll, to be deposited into his personal bank account without the knowledge or approval of other city officials.
• On 17 occasions, Paulino used a city credit card to transfer a total of $37,500 in city funds to two businesses owned by Paulino and his spouse.
• He caused about 55 direct deposits of $54,693 in Velda City funds, purportedly for his spouse's payroll, to be sent to his personal bank account.
• Paulino used a city credit card, city checks and ACH transactions to pay for his personal expenses, including a $25,500 check for a 2007 International tow truck that he used in his private towing business.

Paulino admitted using the money for travel, automobiles, pool supplies, utilities at his personal residence and food and beverage charges.

"The City's police chief, sworn to serve the citizens and the community, turned out to be a thief, stealing from the very community and people he was charged with protecting," Assistant U.S. Attorney Hal Goldsmith said in court. "While receiving a generous salary and benefits in his two city positions," Paulino took advantage of those positions and defrauded a city where the "estimated 1,250 residents have a median household income which is 30% lower than the State of Missouri," he wrote in a sentencing memo.

In a victim impact statement, Velda City Mayor Derrick Gill wrote that Paulino was "the most powerful appointed official in our local government" with "unchecked access to virtually every aspect of City government." The losses caused by Paulino were "devastating," Gill wrote, and destroyed citizens' trust in city officials and city employees' morale. He created a hostile work environment for police officers while "depleting the funds needed to properly staff and equip the department," triggering the department's abrupt dissolution, he wrote.

"Daniel Paulino didn't mastermind a sophisticated scheme; he abused the trust placed in him and exploited a lack of oversight. As the city's financial gatekeeper, he used taxpayer funds for personal expenses, including vacations, vehicles, and even repairs to his swimming pool," said Special Agent in Charge Chris Crocker of the FBI St. Louis Division. "He stole from a community where one in five residents lives below the poverty line. The people of Velda City deserve accountability and a system that prevents this kind of corruption from happening again."

Paulino pleaded guilty in U.S. District Court in St. Louis in November to two counts of wire fraud.

The FBI investigated the case. Assistant U.S. Attorney Hal Goldsmith prosecuted the case.